Burnham Devolution Plan Frees Mayors from Treasury Grip 2026

The Burnham devolution plan is set to free England's regional mayors from the "death grip of the Treasury," allowing them to borrow for major infrastructure projects and retain local tax revenues. This transformational shift in power aims to move decision-making out of Whitehall and into communities.

What the Devolution Plan Includes

Under the new measures, mayors will keep a share of income tax generated in their areas from 2028, alongside business rates totaling tens of millions of pounds by April 2027. While these funds replace existing grants rather than adding new money, local leaders argue that escaping ringfenced Treasury handouts will provide long-term certainty and flexibility.

Andy Burnham, the Labour mayor of Greater Manchester, will announce these changes as "the biggest transfer of power from Westminster in a generation." He emphasizes that "more of the taxes raised in a community will stay in that community," enabling leaders to improve public transport, build homes, and create jobs.

Key Features of the New Powers

• Borrowing authority for large-scale projects without Treasury approval.
• Retention of a portion of income tax and business rates.
• A "local first" principle requiring ministers to justify why powers remain centralized.
• Potential oversight of schools, GPs, and childcare through commissioners.

How It Compares to Current Funding

Currently, local governments rely heavily on annual grants from the Treasury, which are often ringfenced for specific purposes. This limits flexibility and long-term planning. The new model shifts to a more autonomous funding structure, akin to fiscal devolution seen in Scotland and Wales.

Impact on Regions and Civil Service

England's directly elected mayors, who represent areas covering three-quarters of the population, will gain significant economic leverage. Oliver Coppard, the Labour mayor of South Yorkshire, stated, "It's really important because it gets us out of the death grip of the Treasury and gives us that long-term certainty around income."

Additionally, the Prime Minister's office indicated that the civil service, currently 520,000 strong, will become "smaller and more strategic" as responsibilities shift. With one in five officials based in London, this move aims to redistribute expertise and decision-making across the country.

Potential Challenges and Considerations

While the plan is hailed as transformative, critics note that replacing grants with retained taxes may not increase overall funding. Deprived areas with lower tax bases could struggle to generate equivalent revenue. However, proponents argue that the autonomy and ability to borrow will unlock private investment and drive economic growth.

Conclusion

The Burnham devolution plan represents a significant step toward rebalancing power in the UK. By freeing mayors from Treasury control, the government aims to foster local innovation and accountability. As these changes roll out, all eyes will be on how effectively regions utilize their new financial tools.

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